Airline Industry Has Cut Down Their Prediction Of Future Profit Because Of Trade War Issue

Airline Industry Has Cut Down Their Prediction Of Future Profit Because Of Trade War Issue

Business

The trade war issue is hurting US economy very severely, and one can see that after looking at tech, automobile also retail industry. However, now recently, the airline industry has predicted a massive cut in their future profit because of a trade war. The recent reports are coming, which shows that International Air Transport Association has slashed its 2019 profit. Trade war which President trump started is now affecting on airline industry that too with a high margin.

The association predicted earlier industry would earn a $30 billion of profit. However, after looking at the current geopolitical condition, experts have decreased their expectations by approximately $2 billion. The IATA has estimated that airline sector would earn $28 billion of profit as compared to expectations of $30 billion because of increased tariffs. The growth rate of airline industry is declining every year because in 2017 it grew at 9.7% and in 2018 at 3.4%. However, in this year growth rate is going to be flat, which means there’s no hope for airline companies to increase their profit.

Trade war between China-USA is badly hurting airline sector because many companies who are dependent on Asian businesses and customers have lost them, which is resulting in a shortage of profit. Asia is that continent from where more than 40% of the global air cargo traffic comes, and since China is a significant part of Asia, this trade war is hurting airline companies. Experts think airline companies don’t like to lose their share in the Asian market because China and India are those two countries which are growing at a faster rate. In the future, it’s expected that China will have world’s most significant power, and India would grab the spot of third place. US-based airline industry depends a lot upon Asian market, but this trade war is creating some serious problems for sure.

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